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RIL surges over 2% post Q1 results; CLSA, Deutsche Bank see up to 30% upside

Deutsche Bank maintains buy with a target price of Rs 1,165 while JPMorgan retains its neutral rating with a 12-month target price of Rs 1,070.

, ET Online|
Updated: Jul 18, 2016, 01.29 PM IST
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Deutsche Bank maintains buy with a target price of Rs 1,165 while JPMorgan retains its neutral rating with a 12-month target price of Rs 1,070.
Deutsche Bank maintains buy with a target price of Rs 1,165 while JPMorgan retains its neutral rating with a 12-month target price of Rs 1,070.
NEW DELHI: Reliance Industries Ltd (RIL) surged as much as 2.5 per cent on the BSE in the first 30 minutes of trade after stellar Q1 results. Global brokerages such as CLSA, Deutsche Bank maintain buy while JPMorgan maintains a neutral rating on the stock.

CLSA which maintains a buy rating on RIL has the most aggressive target price of Rs 1,350 which translates into an upside of over 30 per cent from Friday's closing price of Rs 1,012.55. Deutsche Bank maintains buy with a target price of Rs 1,165 while JPMorgan retains its neutral rating with a 12-month target price of Rs 1,070.

The energy giant, on Friday, posted a consolidated net profit of Rs 7113 crore, up 18 per cent on a year-on-year basis which was higher than most analyst' estimates. Te oil & gas major reported a net profit of Rs.6,024 crore a year ago.

The operator of the world's largest refining complex, RIL, earned $11.5 on turning every barrel of crude oil into fuel compared with $10.4 gross refining margin (GRM) in the first quarter of the last fiscal. The GRM in April-June period was highest in eight years

Reliance Industries has been going nowhere since long and is stuck in the range of 800-1150 since many years now. The crucial support level on the downside is 965 while the upside resistance is at 1050, say experts.

"Investors should buy the stock if it rises above Rs 1,160 for a price target of Rs 1,450. Traders on the other hand, may continue to buy around support levels of 965/930/890 and sell at resistance levels of 1050/1080/1130," Vinit Pagaria, Senior Vice President - Investment Strategies at Microsec Capital Limited.
We have collated views and recommendations from various brokerage firms on RIL post Q1 results:

CLSA: BUY| Target Rs 1350

CLSA maintains a buy rating on RIL post-June quarter results with a 12-month target price of Rs 1,350. The 1QFY17 net profit result was 16 per cent ahead of consensus driven by a large beat in refining.

Jio is in the final stage of optimising its network and it looks like it is nearing launch, said the CLSA note. RIL is planning to start new projects worth $35 bn in the next six months which could be a key catalyst. "A $6 bn negative equity value for Jio suggests low expectations that could be beaten," said the note.

Deutsche Bank: BUY| Target Rs 1,165

Deutsche Bank maintains a buy rating on Reliance Industries post June quarter results but it slashed its 12-month target price marginally to Rs 1,165 from Rs 1,175 earlier.

A strong profit growth led by robust refining performance is the key for RIL performance in forthcoming quarters. Strong refining margin, this time, drove highest ever quarterly profit in 1QFY17.

Project start-ups to be the key catalyst for the stock said the Deutsche Bank note. The global investment bank slashed its FY17 EPS by 2 per cent to factor in the delay in the ramp-up of the pet coke gas project.

JPMorgan: Neutral| Target Rs 1,070

JPMorgan maintains neutral rating on RIL post Q1 results but raised its 12-month target price to Rs 1070 from Rs 1040 earlier.

The big beat was led by $2/bbl of inventory and risk management in refining. The global brokerage firm remains negative on the refining environment which has worsened.

Telecom is broadly ready, but next year's capital spending still unclear. The stock up move may be limited, although we do expect a positive reaction in near term, said the brokerage note.

(Views and recommendations given in this section are the analysts' own and do not represent those of ETMarkets.com. Please consult your financial adviser before taking any position in the stock/s mentioned.)

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